PepsiCo Doubles Investment in India in 2009

These new investments will be spread across manufacturing capacity, market infrastructure, supply chain, fruit processing, agriculture, and R&D. This is over and above the significant capacity additions made by PepsiCo last year.

03/06/09 PepsiCo India announced that it is more than doubling its investments in its Indian beverage business in 2009.

In the current year PepsiCo’s total system investment in its Indian beverage business will now exceed $220 million. Of this, PepsiCo India will invest over $170 million, with its bottling partners investing the balance. This is by far the largest investment made by PepsiCo in its beverage business since its entry into India in 1989.

PepsiCo’s beverage business momentum has steadily accelerated over the last nine quarters. “We are extremely pleased with our performance in 2009. Our beverage volume is growing around 30 per cent in the current year,” said Mr Sanjeev Chadha, Chairman and CEO, PepsiCo, India Region. “To sustain this growth, I am happy to report that we have decided to revise our earlier investment plans upwards, and are now more than doubling our investments over last year”, he added. PepsiCo is now the fastest growing beverage business in India.

These new investments will be spread across manufacturing capacity, market infrastructure, supply chain, fruit processing, agriculture, and R&D. This is over and above the significant capacity additions made by PepsiCo last year. Over the next three years, capacities will be augmented in other locations, including the setting up of new greenfield plants. The company has already begun scouting around for suitable locations, and will focus on states that offer the best investment environment.

PepsiCo’s strong growth has been spread across the company’s diverse portfolio, with all categories: carbonated drinks, juices, juice-based drinks, sports drinks, as well as water showing strong momentum. The growth has been driven by investments in market infrastructure, innovative marketing campaigns, a stronger distribution network, the launch of new products like the extremely popular Nimbooz, and new packages like the stylish Pepsi My Can.

The excise reduction by the Indian government as part of its fiscal stimulus package, has played a critical role in enabling the company to withstand cost pressures and maintain price stability of its products. PepsiCo wants its new investments to be in place to capture the higher growth potential that it expects India will offer in coming years.